ÚNICA REAL ESTATE, S.L.´s-2016-Financial-Accounts.pdf · Trade receivables 7 7,634 15,316 Other accounts receivable from public authorities 21 15,210 Current financial assets 40,000

ÚNICA REAL ESTATE, S.L. Abridged Financial Statements for the year ended 31 December 2016 (Free translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails.)

ÚNICA REAL ESTATE, S.L. ABRIDGED BALANCE SHEET AS AT 31 DECEMBER 2016 AND 2015

(Expressed in euros) (Free translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails.)

The accompanying Notes 1 to 17 are an integral part of the abridged financial statements.

1

ASSETS Note 2016 2015

NON-CURRENT ASSETS

19,127,638 11,144,737

Intangible assets 5 - -

Property, plant and equipment 5 1,745 21,622

Investment property 5 18,857,126 10,952,296

Non-current financial assets 7 268,767 101,712

Deferred tax assets 11 - 69,107

CURRENT ASSETS

4,188,823 4,801,970

Trade and other receivables

7,655 30,526

Trade receivables 7 7,634 15,316

Other accounts receivable from public authorities

21 15,210

Current financial assets

40,000 -

Cash and cash equivalents 8 4,141,168 4,771,444

TOTAL ASSETS 23,316,461 15,946,707

EQUITY AND LIABILITIES Note 2016 2015

EQUITY

16,888,587 11,673,703

Shareholders’ equity 9 16,888,587 11,673,703

Share capital 9 7,982,400 5,789,430

Share premium 9 8,807,823 5,956,962

Reserves 9 66,391 136,423

Prior years' losses 9 (254,869) (254,869)

Profit for the year

286,842 45,757

NON-CURRENT LIABILITIES

5,843,951 4,155,012

Non-current payables

5,843,951 4,155,012

Bank borrowings 6.1 5,481,594 3,878,550

Other non-current payables 6.1 362,358 276,462

CURRENT LIABILITIES

583,923 117,992

Current payables

480,001 105,221

Bank borrowings 6.1 172,001 105,221

Other financial liabilities

149,500 -

Other current payables

158,500 -

Trade and other payables

103,922 12,771

Payable to suppliers - other related parties 13.1 24,927 6,272

Sundry payables

5,153 -

Other payables 10 73,842 6,499

TOTAL EQUITY AND LIABILITIES

23,316,461 15,946,707

ÚNICA REAL ESTATE, S.L. ABRIDGED STATEMENT OF PROFIT OR LOSS FOR THE YEARS ENDED 31 DECEMBER 2016 AND 2015

(Expressed in euros) (Free translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails.)

The accompanying Notes 1 to 17 are an integral part of the abridged financial statements.

2

PROFIT OR LOSS Note 2016 2015

Revenue 12.1 840,634 420,288

Staff costs 12.4 (44,452) (11,397)

Other operating income 12.2 132,235 134,440

Other operating expenses 12.3 (339,977) (272,547)

Depreciation and amortisation charge 5 (71,559) (38,180)

Impairment and gains or losses on disposals of non-current assets 5 - (74,172)

PROFIT FROM OPERATIONS

516,881 158,432

Finance income 12.5 4,134 110

Finance costs 12.5 (135,697) (97,533)

FINANCIAL LOSS

(131,564) (97,423)

PROFIT BEFORE TAX

385,318 61,009

Income tax 11 (98,476) (15,252)

PROFIT FOR THE YEAR

286,842 45,757

ÚNICA REAL ESTATE, S.L. NOTES TO THE ABRIDGED FINANCIAL STATEMENTS FOR 2016 (Expressed in euros)

(Free translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails.)

5

1. GENERAL INFORMATION Única Real Estate, S.L. (formerly Tucas de Ixea, S.L.) (“the Company”) was incorporated for an indefinite period of time on 2 August 2001 as a private limited liability company through a public deed executed before a Madrid notary under protocol number 2060 and registered at the Madrid Mercantile Registry with employer identification number B-83058651 (volume 16836 general, of section 8 of the Companies Book, sheet 105, page no. M-287747, entry no. 1). Its registered office at 31 December 2016 is located at Calle de O’Donnell, number 12, 8º Planta in Madrid. Its company object includes, among other activities, real estate brokerage, the purchase and sale of buildings, property development and the rent and lease of rural and urban properties, the provision of all manner of professional advisory services and business administration either directly or through investments in other companies. The Company does not belong to any group of companies as defined in Article 42 of the Spanish Commercial Code. The currency of the main environment in which the Company operates is the euro. The figures included in the abridged financial statements are expressed in euros, unless otherwise indicated. These abridged financial statements were formally prepared on an abridged basis, since they meet the requirements contained in Articles 257, 258 and 261 of Legislative Royal Decree 1/2010, of 2 July, approving the Consolidated Spanish Limited Liability Companies Law. They were signed by the directors on 31 March 2017. 2. BASIS OF PRESENTATION 2.1 Fair presentation The abridged financial statements were prepared from the Company's accounting records and are presented in accordance with current Spanish corporate law and the rules established in the Spanish National Chart of Accounts approved by Royal Decree 1514/2007, and the amendments thereto implemented by Royal Decree 1159/2010 and Royal Decree 602/2016, in order to present fairly the Company’s equity, financial position and the results. All the principles and standards included in the Spanish National Chart of Accounts prevailing at the date of formal preparation of these abridged financial statements were taken into consideration. 2.2 Non-obligatory accounting principles No non-obligatory accounting principles were applied. Also, the directors formally prepared these abridged financial statements taking into account all the obligatory accounting principles and standards with a significant effect hereon. All obligatory accounting principles were applied. 2.3 Key issues in relation to the measurement and estimation of uncertainty

In preparing the Company's abridged financial statements, the directors made estimates based on historical experience and other factors that they considered reasonable in view of current circumstances, which constitute the basis for establishing the carrying amount of assets and liabilities that cannot be easily identified using other sources. The Company reviews its estimates on an ongoing basis. However, in view of the uncertainty of these sources, there is a risk that material adjustments might have to be made in the future to the carrying amount of the assets and liabilities affected if there is a significant change in the assumptions, events or circumstances upon which they are based.

The key assumptions regarding the future and other relevant data relating to the estimation of



6

uncertainty at the end of the reporting period that entail a significant risk because they represent significant changes in the value of the assets and liabilities in the coming year are as follows: Useful lives of investment property The Company calculates the estimated useful lives and related depreciation charges for investment property. The useful lives of investment property are estimated in relation to the period in which the items included under this heading will generate economic benefits. At the end of each reporting period, the Company reviews the investment property and if the estimates differ from those made previously, the effect of the change is accounted for prospectively from the year in which the change is made. Fair value of the investment property The Company’s main investment property was acquired mostly in 2014, 2015 and 2016 and, accordingly, the Company estimates that the fair value of these investments is the market price, given the short period of time they have been held. The best evidence of the fair value of the investment property in an active market is the price of similar assets and the related appraisals. In the absence of this information in the current market situation, the Company determines the fair value through the future returns obtained by each of the investment properties held. It should be noted that as from 2016 the fair values were verified by an independent expert. Estimation of the duration of leases The Company has entered into certain operating leases, the main characteristics of which are as follows:

a) The duration of the leases for the lessor usually oscillates at commencement between 7 and 15 years, whereas the obligatory duration for the lessee at commencement of the lease usually oscillates between 2 and 3 years.

b) Initial rent payments with periodic reviews based on the changes experienced by the Spanish Consumer Price Index.

c) The lessee has the obligation to provide a legal security deposit equal to two months of rent payments. In most cases, this legal deposit is supplemented by an additional deposit or guarantee.

d) Leases include early termination clauses in the event of a failure to pay lasting most than 30 days.

Since all the lessees are natural or legal persons from the private sector, the Company is required to deposit the legal deposits received from them at the related official bodies, pursuant to Article 36.6 of Urban Lease Law 29/1994, of 24 November; for instance, in the case of the properties leased in Madrid, these deposits must be deposited at the Madrid Housing Institute (IVIMA). 2.4 Comparative information In the accompanying abridged financial statements no grouping of items was performed in the abridged balance sheet or the abridged statement of profit or loss, as no additional information was required to be included in the notes to the abridged financial statements in relation to their ungrouping.



7

2.5 Items included under several line items There are no items of a similar nature included in several line items in the abridged balance sheet or the abridged statement of profit or loss. 2.6 Changes in accounting policies In 2015 and 2016 no adjustments due to changes in accounting policies were made. 2.7 Correction of errors In 2015 and 2016 no errors were corrected in respect of the comparative year.

3. DISTRIBUTION OF PROFIT The proposed distribution of profit for the year ended 31 December 2016 submitted by the directors but not yet approved by the shareholders and the distribution for 2015 approved on 13 June 2016 are as follows:

Euros

DISTRIBUTABLE PROFIT 2016 2015

Profit for the year 286,842 45,757

Voluntary reserves (Note 9) - 74,608

286,842 120,365

DISTRIBUTION

Dividends 239,472 115,789

Legal reserve (Note 9) 28,684 4,576

Offset of prior years’ losses 18,686 -

Total 286,842

120,365

The distribution of profit complies with the requirements and limitations established in the Company's bylaws and in current law.

4. ACCOUNTING POLICIES The principal measurement bases used by the Company in preparing its abridged financial statements, in accordance with the Spanish National Chart of Accounts, were as follows: 4.1 Intangible assets The various intangible assets are recognised as such since they meet the definition of an asset and the recognition criteria contained in the conceptual accounting framework. Also, they meet the identifiability criterion, since they are separable items that arise from legal or contractual rights, irrespective of whether such rights are transferable or separable. Intangible assets are measured at either acquisition or production cost, without prejudice to the particular rules governing this type of asset. Indirect taxes on intangible assets were only included in the acquisition or production cost when they were not recoverable directly from the tax authorities. The assets were amortised on a systematic and rational basis over their years of useful life, taking into account the related residual value, on the basis of the decline in value that the assets normally suffered through operation and use, without prejudice to the consideration of the technical or



8

commercial obsolescence that might affect them. When impairment losses were recognised, the accumulated amortisation of the impaired asset of the following years was adjusted taking into account the new carrying amount. An intangible asset is impaired if its carrying amount exceeds its recoverable amount. 4.2 Property, plant and equipment Items of property, plant and equipment were measured at either acquisition or production cost, without prejudice to the particular rules governing this type of asset. Acquisition cost also includes directly attributable transaction costs such as taxes directly relating to the acquisition (provided that they are not recoverable from the tax authorities) and registration, notarisation and similar costs. In-house work on property, plant and equipment is valued by adding the direct or indirect costs allocable to these assets to the acquisition cost of the materials used. Only costs of expansion, modernisation or improvements that lead to increased capacity, productivity or to a lengthening of the useful lives of the assets are capitalised, provided that it is possible to know or estimate the carrying amount of the items derecognised as a result of replacement. Items of property, plant and equipment that require more than twelve months to get ready for use include in their acquisition or production cost the borrowing costs which have been incurred before the assets are ready for use and which have been charged by the supplier or relate to other types of borrowings attributable to the acquisition, production or construction of the asset. Property, plant and equipment, except land, which is not depreciated, is depreciated systematically, using the straight-line method, on the basis of their estimated useful lives, considering the actual decline in value resulting from their operation and use. The estimated useful lives are as follows: Years of useful

life % straight-line depreciation

Plant and other buildings 8 12.5% Other fixtures, tools, furniture and equipment 4-10 10%-25%

The residual value and useful life of its assets are reviewed and, if necessary, are adjusted at each balance sheet date. When the carrying amount of an asset is higher than its estimated recoverable amount, its carrying amount is reduced immediately to its recoverable amount. Losses and gains arising from the sale of property, plant and equipment are calculated by comparing the proceeds obtained on the sale with the carrying amount and are recognised in the statement of profit or loss. 4.3 Investment property

“Investment Property” in the abridged balance sheet reflects the values of the land, buildings and other structures held either to earn rentals or for capital appreciation.

Investment property is carried at acquisition cost less accumulated depreciation and any impairment losses. Investment property is depreciated using the straight-line method on the basis of the years of estimated useful life of the related components, which in the case of the Company is as follows: Years of useful % straight-line depreciation



9

life

Buildings 50 2%

4.4 Impairment losses on non-financial assets Assets that are amortised or depreciated are tested for impairment whenever an event or a change in circumstances indicates that their carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the carrying amount of an asset exceeds its recoverable amount, which is understood to be the higher of fair value less costs to sell and value in use. 4.5 Leases Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards incidental to ownership of the leased asset to the lessee. All other leases are classified as operating leases. Operating leases At 31 December 2016 and 2015 the Company had entered into operating leases as the lessor of the investment property that it has recognised (see Note 4.12). Lease expenses resulting from operating leases are charged to the abridged statement of profit or loss in the year in which they are incurred on a straight-line basis over the lease period. 4.6 Financial assets Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are classified as current assets, except when they mature within more than twelve months of the balance sheet date, in which case they are classified as non-current assets. Loans and receivables are included under “Loans to Companies” and “Trade and Other Receivables” in the balance sheet. These financial assets are initially recognised at their fair value, plus any directly attributable transaction costs, and are subsequently measured at amortised cost, recognising the interest income on the basis of the effective interest rate, which is the rate that exactly discounts the instrument’s carrying amount to all the estimated cash flows until maturity. However, trade receivables maturing within twelve months are measured at face value, both at initial recognition and subsequently, provided that the effect of not discounting the cash flows is not material. At least at each reporting date, the necessary impairment losses are recognised if there is objective evidence that not all the amounts receivable will be collected. The amount of the impairment loss is the difference between the carrying amount of the asset and the present value of the estimated future cash flows, discounted at the effective interest rate at the date of initial recognition. Impairment losses and any reversals of impairment losses are recognised in profit or loss. 4.7 Equity The share capital is represented by ordinary shares. The costs of issuing new shares or options are presented directly in equity as a decrease in reserves. In the case of treasury share acquisitions, the consideration paid, including any directly attributable



10

incremental cost, is deducted from equity until they are retired, reissued or disposed of. When treasury shares are sold or reissued, any amount received is taken, net of any directly attributable incremental transaction costs, to equity. 4.8 Financial liabilities

Accounts payable

“Accounts Payable” includes trade payables and non-trade payables. Borrowings are classified as current liabilities unless the Company has an unconditional right to defer their settlement for at least twelve months from the balance sheet date.

These liabilities are initially recognised at fair value adjusted by directly attributable transaction costs and are subsequently measured at amortised cost using the effective interest method. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial instrument to the net carrying amount of the financial liability.

However, trades payables maturing within less than one year which do not have a contractual interest rate are measured at face value, both at initial recognition and subsequently, provided that the effect of not discounting the cash flows is not material.

If existing debts are renegotiated, the financial liability is not deemed to change significantly when the lender of the new loan is the same as the initial lender and the present value of the cash flows, including net fees and commissions, is not more than 10% higher or lower than the present value of the future cash flows payable on the original liability calculated using this same method. 4.9 Provisions and contingencies

Provisions are recognised when the Company has a present obligation, whether legal or constructive, as a result of past events, when it is likely to entail an outflow of resources to settle the obligation and when the amount thereof can be estimated reliably.

Provisions are measured at the present value of the best possible estimate of the amount required to settle or transfer an obligation to a third party. When discounting is used, adjustments made to provisions are recognised as interest cost on an accrual basis. In the case of provisions maturing within or at one year, discounting is not used if the effect thereof is not material. Provisions are reviewed at the end of each reporting period and are adjusted in order to reflect the best current estimate of the related liability at any given time.

When it is expected that a portion of the disbursement necessary to settle the provision will be reimbursed by a third party, the reimbursed amount is recognised as an independent asset, provided that receipt thereof is virtually assured.

A contingent liability is a possible obligation arising from past events whose existence will be confirmed only by the occurrence or non-occurrence of one or more future events not wholly within the control of the Company. Contingent liabilities are not recognised, but rather are disclosed.

The Company’s directors consider that no provisions additional to those recognised by the Company are necessary at the end of the year as a result of any of the aforementioned situations. 4.10 Current and deferred taxes The income tax expense (tax income) is the amount accrued in this connection during the year and comprises current tax expense (current tax income) and deferred tax expense (deferred tax income). Current tax assets and liabilities are measured at the amounts that are expected to be payable to or recoverable from the tax authorities, in accordance with the legislation in force or approved and



11

pending publication at the end of the reporting period. Deferred taxes are calculated in accordance with the balance sheet liability method based on the temporary differences arising between the tax bases of assets and liabilities and their carrying amounts. However, deferred taxes are not recognised if they arise from the initial recognition of a liability or an asset in a transaction other than a business combination which at the transaction date affects neither accounting profit (loss) nor taxable profit (tax loss). Deferred taxes are measured on the basis of the tax rates and laws enacted or substantively enacted at the balance sheet date and which are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled. Deferred tax assets are recognised to the extent that it is considered probable that the Group will have sufficient taxable profits in the future against which the temporary differences can be utilised. 4.11 Classification of assets and liabilities as current and non-current Assets and liabilities are classified in the abridged balance sheet as current and non-current items. For this purpose, assets and liabilities are classified as current when they relate to the Company's normal operating cycle and are expected to be sold, consumed, realised or settled during its normal operating cycle. Current assets and liabilities also include items expected to mature or be disposed of or realised within a maximum of twelve months, items held for trading and cash or cash equivalents the use of which is unrestricted for a period exceeding one year.



12

4.12 Revenue and expense recognition Revenue and expenses are recognised on an accrual basis, i.e. when the actual flow of the related goods and services occurs, regardless of when the resulting monetary or financial flow arises. Revenue is measured at the fair value of the consideration receivable and represents the amounts receivable for the goods and services provided in the normal course of the Company's business, net of sales returns, rebates, discounts and VAT. The Company recognises revenue when it can be measured reliably, it is probable that the future economic benefits will flow to the Company and the specific conditions for each of the activities, detailed below, are met. It is not considered that the amount of revenue can be measured reliably until all the contingencies relating to the sale have been resolved. The Company bases its estimates on historical results, taking into account the type of customer, the type of transaction and the specific terms and conditions of each agreement. The Company’s revenue arises from the operating lease of the investment property that it holds as assets. When the assets are leased under an operating lease, the asset is included in the balance sheet on the basis of its nature. Lease income is recognised on a straight-line basis over the lease term. 4.13 Related party transactions In general, transactions between Group companies and related parties are initially recognised at fair value. In the event that the price agreed upon differs from the fair value thereof, the difference is recognised based on the economic substance of the transaction. These transactions are subsequently measured pursuant to the related standards.



13

5. INTANGIBLE ASSETS, PROPERTY, PLANT AND EQUIPMENT AND INVESTMENT PROPERTY The detail of and changes in these headings in the abridged balance sheet are as fol lows:

Euros

Intangible

assets

Property, plant and

equipment

Investment property

Total

Balance at 31 December 2014 (*) -

140,744

3,044,876

3,185,620

Cost 380

149,307

3,054,503

3,204,190

Accumulated depreciation and amortisation

(380)

(8,563)

(9,627)

(18,570)

Carrying amount 2014 (*) -

140,744

3,044,876

3,185,620

Balance at 1 January 2015 -

140,744

3,044,876

3,185,620

Additions -

2,903

8,398,062

8,400,965

Net disposals -

(126,807)

(463,662)

(590,469)

Depreciation and amortisation charge -

(3,781)

(34,399)

(38,180)

Disposal - depreciation -

8,563

7,419

15,982

Transfers -

-

-

-

Balance at 31 December 2015 -

21,622

10,952,296

10,973,918

Cost 380

25,403

10,988,903

11,014,686


(380)

(3,781)

(36,607)

(40,388)

Carrying amount 2015 -

21,622

10,952,296

10,973,918

Balance at 1 January 2016 -

21,622

10,952,296

10,973,918

Additions -

1,219

8,557,720

8,558,939

Disposals -

(24,316)

(590,841)

(615,157)

Depreciation and amortisation charge -

(2,285)

(69,275)

(71,560)

Disposal - depreciation -

5,505

7,226

12,731

Transfers -

-

-

Balance at 31 December 2016 -

1,745

18,857,126

18,858,871

Cost 380

2,305

18,955,782

18,958,467


(380)

(560)

(98,656)

(99,596)

Carrying amount 2016 -

1,745

18,857,126

18,858,871

(*) 2014 balances not audited

"Investment Property" includes 16 units acquired in Madrid, six of which were acquired in 201, from which the Company earns rental income and which are not occupied by the Company. The total value of the additions to "Investment Property" for the year amounted to EUR 8,557,720.



14



15

The detail of the Company's property portfolio is as follows:

Property Location Date of acquisition

1 Guzmán el Bueno Meléndez Valdés 38 Unit 1 and Unit 2 29 September 2014

2 Orense Orense 22 Bajo 3, Madrid 17 December 2014

3 Núñez de Balboa Núñez de Balboa 64 Bajo Izquierda, Madrid 25 March 2015

4 Concha Espina Concha Espina 69 Unit 1, Madrid 27 April 2015

5 Olímpica Av. Olímpica esq. Av. de la Ermita, Alcobendas, Madrid

27 April 2015

6 Monte Igueldo Monte Igueldo 16, Madrid 25 May 2015

7 Cuchilleros Toledo 10, Madrid 10 July 2015

8 Hortaleza Hortaleza 78 Unit 1A, Madrid 24 September 2015

9 Reina Mercedes Reina Mercedes 13 Unit 3, Madrid 22 October 2015

10 Fernández de los Ríos Fernández de los Ríos 63 Unit on Right, Madrid 25 November 2015

11 Dos de Mayo Dos de Mayo 26, Móstoles, Madrid 1 March 2016

12 Gaztambide Fernández de los Ríos 79, Madrid 4 March 2016

13 Albufera Avenida de la Albufera 25 bajo, Madrid 29 April 2016

14 Bravo Murillo Bravo Murillo 129 planta baja puerta 3 and planta primera unit 1, Madrid

13 July 2016

15 Sánchez Barcaiztegui Granada 53 Planta baja puerta 1, 2 and 3, Madrid 28 October 2016

16 Mayor Soria 5 planta baja unit A, Alcorcón, Madrid 11 November 2016

The disposals relating to "Investment Property" in 2016 mostly related to the sale of a tourist apartment located in Plaza de España, which had a carrying amount of EUR 582,317. The sale of this asset gave rise to a gain for the Company of EUR 63,236. The disposals relating to property, plant and equipment related to furniture and other utensils that were at the tourist apartment that, as indicated, was sold in the year. The cost thereof amounted to EUR 24,316, with accumulated depreciation of EUR 5,505. The disposals relating to “Investment Property” in 2015 related to the unanimous return made to one of the Company’s founding partners of a property valued at EUR 463,662 (housing unit 26-8 belonging to the “Torre de Madrid” building, located in Madrid at the corner of calle Princesa no. 1). In accordance with Measurement Standard no. 2 of the Spanish National Chart of Accounts and the Spanish Accounting and Audit Institute Resolution of 18 September 2013, the Company reviews the fair value, useful life and measurement methods of the properties it holds at least at the end of each reporting period. The fair values of the investment property at the end of 2016 and 2015 do not differ significantly from their carrying amount given the acquisition date thereof. The market value of the properties was determined based on an appraisal made by Savills as an independent valuation expert. These property assets were valued under the market value assumption. Market value is defined as the estimated amount for which an asset should exchange on date of valuation between a willing buyer and willing seller in an arm's length transaction after proper marketing wherein the parties had acted knowledgeably, prudently and without compulsion, less transaction costs. The valuation methodology used by the Company's expert, Savills, is to discount expected cash flows for the next ten years (which have been calculated considering increases in the CPI, the term of contracts, etc.), in accordance with RICS valuation criteria. Following the results obtained through the valuation by the independent expert, no evidence of impairment was detected in any of the properties that make up the portfolio.



16

The Company has arranged insurance policies, the coverage of which is considered sufficient in respect of the carrying amount of the investment property. The Company does not have any intangible assets with an indefinite useful life. At 31 December 2016 and 2015, the Company did not have any firm property, plant and equipment purchase commitments. The Company did not opt to revalue its assets as provided in Law 16/2012, of 27 December, adopting tax measures aimed at consolidating public finances and boosting economic activity. Bank borrowings are secured by land and buildings valued at EUR 17,110 thousand (2015: EUR 10,241 thousand) (see Note 6). From the 2016 reporting date to the date of authorisation for issue, the Company has acquired four new properties, the detail being as follows:

Property Location Date of acquisition

17 León León 25, Madrid 10 January 2017

18 Avenida Felipe II Avenida Felipe II 16 escalera 1 sótano unit 1, piso bajo 10 and piso bajo (entreplanta)17 bis, Madrid

27 January 2017

19 Bravo Murillo (adjacent premises)

C/Bravo Murillo 129 Unit 1, Planta 1, Madrid 2 March 2017

20 Alcalde Luis Marichalar

Corregidor Diego de Valderrabano 25 C, Planta baja Puerta 5ª and 25 D planta baja puerta 6ª, Madrid

9 March 2017

21 Puerto de Balbarán Calle Puerto de Blabarán 45, Planta baja, Puerta A; Madrid

24 March 2017

6. ANALYSIS OF FINANCIAL INSTRUMENTS 6.1 Analysis by category

The carrying amount of each of the categories of financial instruments established in the Recognition and Measurement Standard “Financial Instruments” is as follows (data in euros):

Financial assets 31/12/2016

Financial instrument Current Non-current

Total (Note 7)

Loans, derivatives and other

Loans and receivables 7,634 7,634

Financial instruments 40,000 268,767 308,767

Cash and cash equivalents (Note 8) 4,141,168 - 4,141,168

Total 4,188,802 268,767 4,457,569

“Non-Current - Loans and Receivables” includes the deposits at the Madrid Housing Institute (IVIMA)

(see Note 7). No impairment was detected on the financial assets.



17

Financial liabilities 31/12/2016

Financial instrument Current Non-current Total

Derivatives and other

Accounts payable 158,500 - 158,500

Other financial liabilities 149,500 362,358 511,858

Bank borrowings

Accounts payable 172,001 5,481,594 5,653,595

Total 480,001 5,843,952 6,323,953

Financial liabilities 31/12/2015

Financial instrument Current Non-current Total

Derivatives and other

Accounts payable 12,771 92,712 105,483

Other financial liabilities - 183,750 183,750

Bank borrowings

Accounts payable 105,221 3,878,550 3,983,771

Total 117,992 4,155,012 4,273,004

"Derivatives and Other" relates to the recognition of the guarantees received and security deposits received to secure payment. The loans arranged by the Company with various banks are recognised under "Bank Borrowings":

Bank Amount

drawn down Grant date Maturity Guarantee

Interest rate

Caixa Bank 2,000,000 13/05/2015 13/04/2032 Collateral - Guzmán el Bueno, Orense, Núñez Balboa, Concha Espina, Alcobendas

Floating

Caixa Bank 460,000 21/07/2015 31/08/2032 Collateral - Monte Igueldo Floating

Caixa Bank 1,040,000 23/09/2015 31/10/2030 Collateral - Cuchilleros Floating

Laboral Kutxa 235,800 22/10/2015 01/11/2030 Collateral - Reina Mercedes Floating

Laboral Kutxa 284,000 27/11/2015 27/12/2030 Collateral - Fernández de los Ríos 63 Floating

Sabadell 280,000 25/02/2016 20/03/2036 Collateral - Hortaleza 78 Fixed

Bankinter 320,000 18/04/2016 18/03/2031 Collateral - Fernández de los Ríos 79 (Gaztambide)

Floating

Bankinter 1,100,000 04/05/2016 04/05/2033 Collateral - Avda. Albufera 25 Fixed

Sabadell 340,000 23/06/2016 23/07/2036 Collateral - Avda. Dos de Mayo Fixed

Mortgage loan arranged with CaixaBank on 13 May 2015 for EUR 2 million and maturing at 17 years, which relates to the following properties: Finca no. 7 Av. De la Guindalera, commercial premises Calle Concha Espina 69, Finca urbana Calle Núñez de Balboa 64, Finca urbana Calle Orense 22, Finca urbana no. 1 calle Guzmán el Bueno no. 28, Finca urbana no. 2 Guzman el Bueno no. 28.

Mortgage loan arranged with CaixaBank on 21 July 2015 for EUR 460,000 and maturing at 17 years, which relates to the urban property at c/ Monte Igueldo no. 16 Madrid planta baja.

Mortgage loan arranged with CaixaBank on 23 September 2015 for EUR 1,040,000 and maturing at 15 years, which relates to the urban property and commercial premises at calle Cuchilleros nº 7, planta baja, Madrid.



18

Mortgage loan arranged with Laboral Kutxa on 22 October 2015 for EUR 235,800 and maturing at 15 years, which relates to the urban property located in Madrid at Calle Reina Mercedes no. 13, planta baja, puerta 3ª and commercial premises no. 3 en planta baja y sótano.

Mortgage loan arranged with Laboral Kutxa on 27 November 2015 for EUR 284,000 and maturing at 15 years, which relates to the urban property located in Madrid at Calle Fernandez de los Ríos no. 63, planta baja, puerta derecha.

Mortgage loan arranged with Banco Sabadell on 25 February 2016 for EUR 280,000 and maturing at 20 years, which relates to the urban property located in Madrid at Calle Hortaleza no. 78 Planta Baja, Derecha, 28004.

Mortgage loan arranged with Bankinter on 18 April 2016 for EUR 320,000 and maturing at 15 years, which relates to the urban property located in Madrid at Calle Fernandez de los Rios no. 79, Planta Baja Pta. 1A, 28015.

Mortgage loan arranged with Bankinter on 4 May 2016 for EUR 1,100,000 and maturing at 17 years, which relates to the urban property located in Madrid at Avenida Albufera no. 25, Planta Baja Pta. Dr, 28038. Mortgage loan arranged with Banco Sabadell on 23 June 2016 for EUR 340,000 and maturing at 20 years, which relates to the urban property located in Mostoles (Madrid) at Avenida Dos de Mayo no. 26, Planta Baja Pta, 16ª, 28934.

The Company has not breached any clause in the foregoing financing agreements that could trigger early termination. The interest rates on the foregoing loans in the year ended 31 December 2016 ranged from 1.5% to 3.5%. From the 2016 reporting date to the date of authorisation for issue, the Company has entered into four financing agreements, the detail being as follows:

Bank Amount

drawn down Grant date Maturity Guarantee

Interest rate

Bankinter 1,000,000 12/01/2017 13/01/2034 Collateral - Sanchez Barcaitéguiz Fixed

Laboral Kutxa 280,000 10/01/2017 10/01/2032 Collateral - León 25 Floating

Bankinter 532,000 09/03/2017 09/03/2034 Collateral - Alcalde Luis de Marichalar 3

Fixed

Sabadell 400,000 20/03/2017 20/04/2037 Collateral - Alcorcón, Mayor 41 Fixed

6.2 Analysis by maturity The financial liability instruments classified by year of maturity at 31 December 2016 and 2015 were as follows:



19

2016

Financial liabilities 31/12/2017 31/12/2018 31/12/2019 Subsequent

years Total

Trade and other payables 103,922 - - - 103,922

Other current payables 158,500 - - - 158,500

Bank borrowings 172,001 185,159 224,671 5,071,764 5,653,595

Guarantees received (Note 10) - - - 178,607 178,607

Deposits received 149,500 - - 183,750 333,250

Total 583,923 185,129 224,671 5,433,761 6,427,874

2015

Financial liabilities 31/12/2016 31/12/2017 31/12/2018 Subsequent

years Total

Trade and other payables 12,771 - - - 12,771

Bank borrowings 105,221 106,530 118,318 3,653,702 3,983,771

Guarantees received (Note 10) - - - 92,712 92,712

Deposits received - - - 183,750 183,750

Total 117,992 106,530 118,318 3,930,164 4,273,004

7. Non-current and current financial assets The changes in “Non-Current and Current Financial Assets” in 2016 and 2015 were as follows:

Euros

2016

Beginning

balance Additions

Disposals

Transfers Ending balance

Guarantees deposited at the Madrid Housing Institute (IVIMA)

101,712 64,150 21,094

- 144,768

Fixed-term deposits - 164,000 - - 164,000

Total 101,712 228,150 21,094

- 308,768

Euros

2015

Beginning

balance Additions

Disposals

Transfers Ending balance

Guarantees deposited at the Madrid Housing Institute (IVIMA)

- 101,712 - - 101,712

Total - 101,712 - - 101,712

At 31 December 2016, the Company had 16 commercial premises leased (31 December 2015: ten commercial premises and one apartment). The fair value of the financial assets does not differ significantly from their carrying amount since they were recognised in 2015. Pursuant to Article 36 of Spanish Urban Lease Law 29/1994, of 24 November, the Company deposited an amount equal to the deposits at the Madrid Housing Institute (IVIMA). As established in this article, it is not necessary to discount the values until three years. This amount must be returned to the lessee at contract expiration without any increase or interest, since this circumstance was taken into account on arrangement of the lease between the lessor and lessee.

Comentado [BR1]: error en original en la fecha



20

The fixed-term deposits amounting to EUR 80,000 related to a counter guarantee that the Company was required to arrange with Bankinter on 19 October 2016 subsequent to the purchase of the property located at calle Granada, 53. The rest of the amount recognised -EUR 84,000- related to the pledge of an account to secure a loan with La Caixa. The guarantee matures in 2029.



21

8. CASH AND CASH EQUIVALENTS The detail of “Cash and Cash Equivalents” at 31 December 2016 and 2015 is as follows:

Euros

2016 2015

Cash on hand 55 22

Cash at banks and credit institutions 4,141,113 521,422

Cash equivalents - 4,250,000

Ending balance at 31 December 4,141,168 4,771,444

The cash held by the Company at 31 December 2016 and 2015 related in full to the balance of the accounts it holds at Caixabank, Laboral Kutxa, Banco Sabadell and Bankinter. In 2015 the Company entered into term savings agreements with Caixabank, which at 31 December 2015 had a balance payable to the Company of EUR 4,250,000 and matured in February 2016. 9. SHAREHOLDERS’ EQUITY 9.1 Share capital The Company was incorporated with initial capital of EUR 3,010, divided into 301 indivisible and cumulative shares of EUR 10 par value each, numbered sequentially from 1 to 301, inclusive, subscribed and paid by Chester Rout, S.A., which subscribed 300 shares and, therefore, was the Company’s majority shareholder at that time. On 13 March 2015, it was unanimously resolved to increase capital by EUR 1,063,340, i.e. up to the amount of EUR 1,066,350, through the creation of 106,334 new shares of EUR 10 par value each, numbered from 302 to 106,635, inclusive, with a share premium of EUR 10 per share, i.e. a total share premium of EUR 1,063,340. In accordance with Article 301 of the Spanish Limited Liability Companies Law, the new shares were created through the conversion of debt into capital following the express waiver of the other shareholders of their pre-emption rights and, therefore, the participating loan of 29 December 2014 held vis-à-vis the Company by the majority shareholder Eduardo Pájara Quirós amounting to EUR 2,126,680 was converted into capital. The loan arose from matured, liquid and claimable borrowings that the Company had arranged with its shareholder. Accordingly, the 106,334 new shares were subscribed by Eduardo Pájara Quirós. On 13 March 2015, it was unanimously resolved to approve a reduction of the share capital with a return of contributions amounting to EUR 216,460 through the retirement of 21,646 shares numbered from 84,990 to 106,635, inclusive; the share capital was reduced to EUR 849,890, represented by 84,989 shares of EUR 10 par value each, numbered from 1 to 84,989. Also, it was unanimously resolved to return to Eduardo Pájara Quirós the shares that were retired to which he held title under the aforementioned capital increase, with both the par value and share premium paid being returned to him.



22

Accordingly, it was unanimously resolved to return EUR 432,920 through the return by the Company of a property valued at this amount (housing unit 26-8 belonging to the “Torre de Madrid” building, located in Madrid at the corner of calle Princesa no. 1). The property was free and clear of any liens or charges at the time of return. On 17 March 2015, it was unanimously resolved to increase capital by EUR 465,300, i.e. up to the amount of EUR 1,315,190 through the creation of 46,530 new shares of EUR 10 par value each, numbered from 84,990 to 131,519, inclusive, with a total share premium of EUR 384,598 relating to EUR 8.2656 per share. Following a waiver by the other shareholders of their pre-emption rights, the new shares were subscribed and paid by the majority shareholder (27,370 shares) and two new shareholders (19,160 shares). On 10 April 2015, it was unanimously resolved to increase capital by EUR 1,156,290, i.e. up to the amount of EUR 2,471,480 through the creation of 115,629 new shares of EUR 10 par value each, numbered from 131,520 to 247,148, inclusive, with a total share premium of EUR 1,143,570 relating to EUR 9.89 per share. Following a waiver by the other shareholders of their pre-emption rights, the new shares were subscribed and paid in full by 13 new shareholders, although none of them acquired a majority ownership interest in the Company. On 1 June 2015, it was unanimously resolved to increase capital by EUR 1,156,380, i.e. up to the amount of EUR 3,627,860 through the creation of 115,638 new shares of EUR 10 par value each, numbered from 247,149 to 362,786, inclusive, with a total share premium of EUR 1,143,660 relating to EUR 9.89 per share. Following a waiver by the other shareholders of their pre-emption rights, the new shares were subscribed and paid in full by the 13 new shareholders described in the foregoing transaction, although none of them acquired a majority ownership interest in the Company. On 2 November 2015, it was unanimously resolved to increase capital by EUR 2,161,570, i.e. up to the amount of EUR 5,789,430 through the creation of 216,157 new shares of EUR 10 par value each, numbered from 362,787 to 578,943, inclusive, with a total share premium of EUR 2,438,251 relating to EUR 11.28 per share. Following a waiver by the other shareholders of their pre-emption rights, the new shares were subscribed and paid in full by existing shareholders (68,135 shares) and ten new shareholders (148,022 shares). The share capital subsequent to the increases amounted to EUR 5,789,430, represented by 578,943 equal, indivisible and cumulative shares of ten euros (EUR 10) par value each, numbered sequentially from 1 to 578,943, inclusive. On 29 September 2016, it was unanimously resolved to increase capital by EUR 2,192,970, i.e. up to the amount of EUR 7,982,400 through the creation of 219,297 new shares of EUR 10 par value each, numbered from 578,944 to 798,240, inclusive, with a total share premium of EUR 2,850,861 relating to EUR 13 per share.

Comentado [BR2]: Hay una "u" en original



23

Following a waiver by the other shareholders of their pre-emption rights, the new shares were subscribed and paid in full by eleven existing shareholders (105,390 shares) and nine new shareholders (113,907 shares). The share capital at 31 December 2016 subsequent to the increase amounted to EUR 7,982,400, represented by 798,240 fully paid, equal, indivisible and cumulative shares of EUR 10 par value each, numbered sequentially from 1 to 798,240, inclusive. 9.2 Share premium This reserve is unrestricted. At 31 December 2016, the reserve amounted to EUR 8,807,823 (31 December 2015: EUR 5,956,962) as a result of the aforementioned capital increases performed in 2015 and 2016. 9.3 Legal reserve

Appropriations to the legal reserve were made in accordance with Article 274 of the Spanish Limited Liability Companies Law, which establishes that, in any case, 10% of net profit for each year must be transferred to the legal reserve until the balance of this reserve reaches at least 20% of share capital. As a result of the capital increases that took place in 2015 and 2016, the legal reserve has not fully reached the legally required minimum and, accordingly, 10% of the net profit for 2016 and future years must be transferred until it reaches the legally required minimum. The legal reserve may not be distributed and, if it is used to offset losses, where sufficient other reserves are not available for this purpose, it must be replenished out of future profits. 10. ACCOUNTS PAYABLE

Euros

2016

2015

Non-current accounts payable:

- Bank borrowings (Note 6) 5,481,594

3,878,550 - Financial guarantees received (Note 33) 362,357 276,462

Total non-current payables 5,843,951 4,155,012

Current accounts payable:

- Bank borrowings (Note 6) 172,001

105,221 - Other financial liabilities (Note 6) 308,000

-

- Payable to suppliers 24,927

6,272 - Accounts payable 5,153

-

- Other accounts payable 73,842 6,499

Total current payables 583,923 117,992

The carrying amount of the current and non-current payables does not differ from their fair value, since the effect of discounting is not material. At 31 December 2016, the bank borrowings totalled EUR 5,653,595 (31 December 2015: EUR 3,983,771). The Company did not have any interest payable that was due but not yet paid on the loans at the end of 2016 and 2015. The bank loans are secured by land and buildings (see Note 5). The directors consider that the Company will be able to comply in a timely manner with all the contractual obligations arising from the loans.



24

11. TAX MATTERS The detail of the deferred tax is as follows:

Euros

2016 2015

Deferred tax assets:

- Tax loss carryforwards - 69,107

Deferred tax liabilities: - -

Deferred tax - 69,107

Deferred tax assets relating to tax loss carryforwards are recognised to the extent that it is probable that the Company will obtain taxable profits in the future against which they can be used. The Company declared tax loss carryfowards in 2015 of EUR 276,478, which were offset in full in 2016. The reconciliation of the net income and expense for the year to the taxable profit for 2016 is as follows:

2016

Statement of profit or loss

Increases Decreases Total

Income and expenses for the year - - 286,842

Income tax - - 98,476

Permanent differences 8,587 - 8,587

Offset of tax losses - - (276,478)

Tax base (taxable profit) 117,427

The reconciliation of the net income and expense for the year to the taxable profit for 2015 is as follows:

2015

Statement of profit or loss

Increases Decreases Total

Income and expenses for the year - - 45,757 Income tax - - 15,252 Offset of tax losses - - (61,010)

Tax base (taxable profit) - - -

In accordance with the current Spanish Income Tax Law, should taxable profit arise pursuant to applicable law, the amount thereof could be offset by the tax losses that had not yet been offset. Legislative Royal Decree 4/2004, of 5 March, approving the Consolidated Spanish Income Tax Law, in force since 2014, established that tax losses could be offset within the 18 years immediately or successively following the year in which the loss arose. However, Law 27/2014 established that the period for offset of tax losses is unlimited. The tax loss will be offset when the income tax return is filed, without prejudice to the tax authorities' inspection powers. Law 27/2104 established that the authorities have ten years to review the origin of the offset. In addition, Law 3/2016 introduces a quantitative limit on the offset of tax losses to 60% of the taxable income prior to offset and requires, in all cases, a minimum amount of EUR 1 million.



25

The Company had the last four years open for review by the tax authorities for the main taxes applicable to it.

Type of tax Years open for review

Income tax 2011 - 2015 VAT 2012 - 2016 Personal income tax withholdings 2012 - 2016 Employer social security taxes 2012 - 2016

As a result of, among other factors, varying interpretations of current tax legislation, additional liabilities may arise as a result of a tax audit. In any case, the directors consider that these liabilities, should they arise, would not have a material effect on the financial statements. 12. INCOME AND EXPENSES 12.1 Revenue All the income for the year arose from the performance of the assets described in Note 5 to these abridged financial statements and is due exclusively to the lease of the properties.

Euros

2016 % 2015 %

Lease of premises 832,119 99 371,414 88 Tourism-related leases 8,515 1 45,387 11 Other - - 3,487 1

840,634

420,288

12.2 Other operating income Of the EUR 132,235 (2015: 134,440) recognised under "Other Operating Income" in 2016, EUR 63,236 related to a gain on the sale of the tourist apartment in Torre Madrid. EUR 68,772 was recognised in connection with compensation for the early leave of two tenants and EUR 227 as exceptional income. 12.3 Other operating expenses Euros

2016

2015

Leases and charges (29,485)

(12,211) Repair and upkeep expenses (2,171)

(715)

Independent professional services (37,261)

(29,885) Insurance premiums (6,726)

(5,307)

Banking and similar services (1,767)

(12) Advertising and public relations (361)

(1,200)

Utilities (3,539)

(1,504) Other services (223,462)

(210,077)

Taxes other than income tax (26,618)

(11,636) Negative adjustments to indirect taxes (8,587)

-

Total (339,977)

(272,547)

12.4 Staff costs The detail of “Staff Costs” is as follows:

Euros

2016

2015



26

Staff costs

Wages and salaries

(34,816)

(9,000) Employer social security taxes

(9,636)

(2,397)

(44,452)

(11,397)

The average number of employees in 2016 and at the reporting date, by professional category, was as follows: Professional category

2016

2015

Clerical staff

2

1

Total

2

1

12.5. Financial loss

Euros

2016

2015

Finance costs

On debts to third parties (135,697)

(97,533)

Finance income

On deposits from third parties 4,134

110

Financial loss (131,564)

(97,423)

The finance costs relate to the interest incurred at the end of the year on the bank borrowings (see Note 10) and to the cost of arranging the loans. 13. RELATED PARTY TRANSACTIONS 13.1 Related party balances at year-end Year-end balances arising from services received by the Company from related parties:

Euros

Payables 2016

2015

Evoltium, S.L. 23,374

6,272 Dutilh Abogados, SLP 605

-

Total balances payable 23,979

6,272

13.2 Related party transactions

Euros

Services received 2016

2015

Evoltium, S.L. 59,374

32,272 Dutilh Abogados, SLP 27,924

15,731

Total services received 87,298

48,003



27

At 31 December 2016, the Company had a balance payable of EUR 23,374 (31 December 2015: EUR 6,272) to Evoltium, S.L. for variable remuneration as a result of the agreement entered into between the parties in April 2015, whereby Evoltium, S.L. was designated as the administrator and manager of the assets of Única Real Estate, S.L. and the provision of other management and general administration services. The total remuneration received by Evoltium, S.L. at 31 December 2016 amounted to EUR 59,374 (2015: EUR 32,272). The transactions recognised in respect of Dutilh Abogados SLP relate in full to the fees paid for services provided and the sublease of the office located at calle O'Donnell 12. 14. CONTINGENCIES AND OBLIGATIONS The directors consider that there are no contingencies or obligations additional to those expressed in these abridged financial statements. 15. REMUNERATION OF DIRECTORS AND SENIOR EXECUTIVES 15.1 Remuneration paid to members of the Board of Directors The directors of Única Real Estate, S.L. did not receive any remuneration for wages, attendance fees, bonuses or premiums in the years ended 31 December 2016 and 2015. No shares or share options were received in 2016, no options were exercised and there were no options that had not yet been exercised. In addition, no contributions were made to pension funds or plans on behalf of the directors. 15.2. Ownership interests, positions held by and similar activities of the members of the Board of Directors As part of their duties to avoid conflicts of interest with the Company's interests, the directors who held positions on the Board of Directors in the year complied with the obligations set forth in Article 228 of the Consolidated Spanish Limited Liability Companies Law. Furthermore, the directors and persons related to them did not become involved in the cases of conflict of interest provided for in Article 229 of the aforementioned law, except in cases in which the related authorisation was obtained. 16. OBLIGATIONS At the end of the year the Company had not arranged any firm purchase and sale agreements and/or orders. 17. EVENTS AFTER THE REPORTING PERIOD The Company acquired five properties in the first half of the year. The new premises are located at calle León, 25, Avenida de Felipe II, 16, calle Corregidor Diego de Valderrabano, 25 C, calle Puerto de Blabarán 45 and the premises adjacent to the unit at Bravo Murillo,129, all of which are located in Madrid. The total acquisition cost of the five properties was EUR 4,463 thousand (see Note 5). In addition, the Company entered into four financing agreements with three different banks (Bankinter, Banco Sabadell and Laboral Kutxa) totalling EUR 2,212 thousand (see Note 6).

ÚNICA REAL ESTATE, S.L. AUTHORISATION FOR ISSUE OF THE ABRIDGED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016

In conformity with the requirements of Article 253 of the Spanish Limited Liability Companies Law and Article 37 of the Spanish Commercial Code, on 31 March 2017, the directors of Única Real Estate, S.L. hereby authorise for issue the abridged financial statements for the year ended 31 December 2016, which consist of the accompanying documents preceding this page.

Madrid, 31 March 2017

Signed: Benito Cesáreo Berceruelo Gonzalez

Signed: Eduardo Paraja Quirón Signed: Andrés Femia Bustillo

Signed: José Javier Osés Navaz Signed: Joaquín Caicoya Urzaiz

Documents

ÚNICA REAL ESTATE, S.L.´s-2016-Financial-Accounts.pdf · Trade receivables 7 7,634 15,316 Other accounts receivable from public authorities 21 15,210 Current financial assets 40,000